trpf and crises

April 10, 2013

I’ve been reading a little about Marx’s theory of the tendency of the rate of profit to fall lately; and while I think I get the gist of it, I’m still not sure I entirely understand the specifics. That said, one of the more intriguing aspects of TRPF to me is the role that crises play in acting as what Marx calls a ‘counteracting factor.’ Assuming that the theory of the tendency of the rate of profit to fall is true — as Smith, Ricardo, Marx, et al. believed was an empirical phenomena — giving rise to crises, crises in turn destroy superfluous (i.e., unproductive) capital and labour, creating unemployment and a reserve army of labour, which both drives down wages and decreases the labour force, allowing capital to increase profits even if the tendency of the rate of profit falls in the long term.

Perhaps this is one of the things that make capitalism appear like a perpetual growth/profit-making machine, as well as more stable than it truly is. This seems to be somewhat similar to Chris Harman’s take on the TRPF, i.e., that crises are the prime counteracting factors mentioned by Marx, with recoveries being limited in effectiveness over time due to a combination of things like units of capital become larger and more interlinked (the bigger they are, the harder they fall) and increases in the level of unproductive labour in both the private and public sector (the former due to capital attempting to defend and expand markets in unproductive ways, waves of speculative investments, top-heavy corporate hierarchies, etc.; the latter due to government spending via the military, stimulus measures, etc.).

The real limit to crises as a counteracting factor, however, may be labour itself, specifically labour time, which capital tries to increase in order to extract more profit (surplus value) from the labourer in order to compensate for a falling rate of profit and the fact that much of this labour is itself superfluous, i.e., labor time that “consists in the production of values that do not reenter the capitalist reproduction process” (Jehu). But a person can only work so much, and if the labour itself is ‘unproductive,’ increasing it only serves to lower the rate of profit in the long term. This, in turn, creates the conditions for future (and potentially more severe) crises. One possible solution on the road to a post-capitalist society, then, may actually be an overall reduction in hours of labour:

The distribution of the mass of profit produced by productively employed capitals is, in part, settled by competition between the class of owners of capital. Under conditions of a general and comprehensive reduction of hours of labor, productively employed capital can increase their profits by reducing the expenditure of labor in unproductive forms, such as the state sector. While the state is incapable of increasing itself, by increasing its unproductive consumption of the surplus value produce by productively employed capital, i.e., by raising taxes or borrowing.

In the first place, a general and comprehensive reduction of hours of work — e.g., from 40 to 24 hours — must result in a reduction first of the state sector. In the second place, it must result in massive shift of the employment of labor from unproductive capitals (e.g., finance) to productive capitals. The losers in such a reduction would be first the state, second those capitals producing for the state (defense contractors) and financing it (Wall St.). By contrast, the productive employment of capital becomes more profitable, although the actual quantity of surplus value produced is smaller. Although less actual surplus value is produced, less also has to be shared with a mass of unproductive capitals and the bloated state.

This must increase demand for the productive employment of labor power, along with an increase in the wages. The rise in wages would in turn force productively employed capitals to further rationalize expenditures of labor through methods that improve the productivity of labor. Although employment is rising, along with wages, the actual improvement of the productivity of labor compels the further reduction of hours. In this way, there is both a rapid increase in the material living standards of the mass of society and more disposable time.

Reducing hours of labor not only means free disposable time for the mass of society, it pays for itself by compelling capital to revolutionize the labor process and increase the efficient employment of existing labor power. In Capital somewhere, Marx argues the capitalist class is, historically speaking, only the stewards of the total capital, who used their position to the disadvantage of the mass of society. This might not have been obvious in his day, but with the professional class of managers who have since arisen and now shuttle between Washington and Wall Street, and the resulting division of ownership from effective control of capital, it is clear this is all that class ever was. Paris Hilton’s family has long since retired to the vocation of coupon-clipping, while her functions have been assumed by these parasites.